Florida Guardianship Court Orders Trust Accounting Where Commingling

September 22, 2019

At first glance, Florida statutes appear to clearly distinguish the law of trusts from that of guardianships, devoting one chapter (Ch. 736) exclusively to trusts and another chapter (Ch. 744) exclusively to guardianships.

While the two seem conceptually, administratively, and legally distinct on paper, this is often not the case in practice—particularly where one individual is simultaneously serving as guardian and trustee. Florida courts routinely address the interplay between these two fields, notably in the landmark case Covenant Trust v. Irhman, 45 So. 3d 499 (Fla. 4th DCA 2010).

In Covenant Trust, an Illinois trustee was accused by a Florida guardian of breaching its fiduciary duties. The Illinois trustee was accused of these breaches in a petition that the trustee received in the mail. The Florida guardian asked the Florida probate judge to take control of the trust and to order the trustee to pay Florida guardianship expenses. The Florida guardian also requested that the trustee no longer use the trust assets to pay the trustee’s lawyers.

Can A Florida Guardianship Court Compel a Foreign Trustee To Act?

Not without proper jurisdiction and evidence.

Florida’s Fourth District Court of Appeal reiterated the longstanding principle that a guardianship court does not have the inherent authority to compel a trustee to act. Regarding the trustee paying legal fees from the trust funds, the court stated:

To obtain an order prohibiting Covenant from paying any more attorney’s fees from the trust assets, section 736.0802(10)(b) states that the “party must make a reasonable showing by evidence in the record or by proffering evidence that provides a reasonable basis for a court to conclude that there has been a breach of trust.”

Instead, Covenant Trust explains that in the absence of a statutory or trust directive, a guardianship court may only compel a trustee to act where the trustee has acted arbitrarily or committed some act of malfeasance that affects the guardianship. And for such a determination, there must be evidence.

This separation facilitates administration of a trust without interference from a pending guardianship. However, as demonstrated time and again in practice, this distinction is often more theoretical than empirical.